August 25, 2011 at 11:05 am

New York State Comptroller Thomas DiNapoli proposed a new remediation fund on Aug. 9 designed to clean up environmental contamination resulting from the method of natural gas drilling known as hydraulic fracking. The fund would be financially supported by the gas industry.

But fracking — the lucrative, yet controversial practice of extracting natural gas from shale rock far below the Earth’s surface using a mixture of water and chemicals — is currently unallowed in New York, at least until June 1, 2012. On Wednesday, WCNY‘s Susan Arbetter interviewed DiNapoli about why he thinks the fund needs to be created now.

The New York State Department of Environmental Conservation is currently working on a full review of the environmental impact of the process with proposed regulations, which is planned for completion next year. The DEC has released a portion of its 1,095-page draft of the proposed state regulations on fracking, and a 60-day period for the public to comment on the draft is scheduled to begin “sometime in the next few weeks,” according to the DEC. Therefore, the preemptive nature of DiNapoli’s proposal is considered both unorthodox and controversial by many lawmakers.

“This fund is financed through fees from the industry, and the Department of Environmental Conservation, in the most extreme cases, has to quickly come in on emergency basis, hire contractors, remediate, clean up the spill, solve the problem, and then — working with the attorney general’s office — go after the responsible parties,” DiNapoli told Arbetter.

With the kind of remediation fund he’s put on the table, DiNapoli says, “When there’s a problem, there’s a solution. It’s immediate.”

Fracking in Burlington, PA. While fracking has generated significant wealth for the state, opponents wage that it's had a devastating impact on the environment and is not a financially sustainable industry. AP/Ralph Wilson.

In addition to costly cleanups, DiNapoli says the fund would fill a void in the DEC’s currently proposed rules for fracking, which state that if a homeowner’s drinking water is contaminated by the fracking process, their only option is to sue the gas company: an extremely costly and time-consuming process, to say the least.

Gov. Andrew Cuomo has voiced opposition to the fund, and would prefer to consider it after the Department of Environmental Conservation has finished their report.

Gas industry representatives have shared the governor’s sentiment. “There is simply no basis for such a fund at this time,” Brad Gill, executive director of the Independent Oil and Gas Association, told the Wall Street Journal.

In response to the criticism that a remediation fund shouldn’t be introduced before the fracking ban is lifted, DiNapoli said that we already have natural gas drilling in New York, referring to the traditional drilling method that doesn’t involve fracking. The remediation fund would cover the cleanup of any contamination created by the current drilling method, as well as fracking — if the moratorium on fracking is lifted.

Republican State Sen. Greg Ball and Assemblyman Bob Sweeney, chair of the Assembly Environmental Conservation Committee, are in support of the fund, reported Arbetter.

The current DEC draft of regulations indicates that fracking in New York is safe, and given the relatively short public comment period, DiNapoli’s timing for proposing the fund is not as preposterous as it may initially appear.

“Just look at PA. There have been accidents. There have been problems there,” said DiNapoli, referring to instances of environmental contamination and deaths caused by fracking in Pennsylvania.

Environmental advocacy groups have expressed many concerns over fracking in recent years, and the DEC’s suggestion that the practice can be safely performed up to 500 feet away from aquifiers — the layers of permeable rock from which well water is extracted — has raised many red flags from groups worried about drinking water contamination.

Despite industry claims to the contrary, there have been numerous reported cases of highly contaminated drinking water in other states where fracking is legal, like Pennsylvania. Even more disconcerting to fracking opponents are the instances of homeowners with contaminated land being offered nondisclosure agreements, commonly referred to as “hush money,” by gas companies, reported the New York Times.

A looming issue in the fracking debate involves oil and gas companies refusal to reveal all the chemicals used in the fracking process, which the companies claim are trade secrets. On Thursday, the Wall Street Journal reported that the Securities and Exchange Commission is currently pressing oil and gas companies to name all the substances contained in their liquid fracking mixtures, out of fear that fracking-related disasters could scare off investors and negatively impact the economy. And on Thursday afternoon, New Jersey Gov. Chris Christie is expected to announce whether New Jersey will become the first state to permanently ban fracking, reported the Star-Ledger.

As proponents and opponents voice their opinions, it remains unclear if new York’s temporary fracking ban will be removed next year. A recent Quinnipiac Poll shows that New Yorkers believe the economic benefits of fracking outweigh the environmental risks by a 47-42 margin.

It’s easy to see why. A Penn State study showed that fracking generated $11.2 billion in economic activity and created 140,000 jobs in 2010. That study was funded by the Marcellus Shale Coalition, a pro-drilling organization.

Despite the economic boom generated by fracking in Pennsylvania, it’s noteworthy that the fervor to frack has been deemed fiscally unsustainable by some economists, who say the whole industry is prone to quick boom and bust bubbles that can be highly detrimental to local economies in the long-term, reported the New York Times.

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